The principles of Stress, Rest & Test ( as well as Volume, Recovery & Intensity), still apply. They are applied however to each MOVEMENT individually as opposed to being applied to each DAY.
Its hardly a misunderstanding, rather a different way of applying the same principles.
Squats 5x5 for volume, front squats for recovery, max for intensity.
Bench 5x5 for volume, oh press for recovery, max for intensity.
DLs/pulls rows 5x5 for volume, lighter GM's or power cleans for recovery, one heavy set of FL for intensity.